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Are Leaders Ready for VUCA?

The concept of VUCA – Volatility, Uncertainty, Complexity, and Ambiguity—originated in U.S. military planning in reaction to newly intense operational pressures following the Cold War. In recent years, as disorder and chaos have garnered more attention through books such as Nassin Nicholas Taleb’s 2012 book Antifragile, the VUCA concept has been appropriated to characterize the challenges of today’s business environment.

To better understand the implications of a VUCA-laden reality for optimization of strategic talent—where and how they are likely to struggle—we drew on a database of thousands of executive assessments from dozens of organizations. While strategic leaders, and those aspiring to the strategic level, aren’t the only leaders who need to be able to navigate a VUCA business environment, given their place at the top of the organizational pipeline, strategic leaders can be viewed as emblematic of their organization’s VUCA-readiness. What’s more, their readiness can be analyzed fairly effectively because of the breadth and depth of available assessment data.

For the executive assessments from which the data we examined was compiled, structured exercises in a rigorously-simulated environment elicited key behaviors which were evaluated by extensively-trained assessors. All strategic leaders had an equal chance to exhibit their skills, and those who failed to do so received lower evaluations accordingly.

Although we evaluated dozens of key behaviors, for this research we isolated behaviors most closely linked to VUCA. We saw whether strategic leaders demonstrated the skills needed to guide themselves, their employees, and their organizations through the rough waters brought on by a progressively volatile, uncertain, complex, and ambiguous business context.

To counteract Volatility, we looked for evidence of building a shared vision, making a compelling case to build others’ commitment, and inspiring others toward a challenging future.

In response to Uncertainty, we focused on the ability of senior leaders to gain knowledge and understanding for themselves and others by gathering, integrating, and analyzing complex information.

To deal with surging Complexity, we looked at senior leader behaviors to build clarity by devising and executing clear communications, translating high-level initiatives into tactics, and conveying expectations to employees.

Finally, as the antidote to Ambiguity, we gauged senior leaders’ adaptability, ability to stay focused and manage stress, and effectiveness at—despite the lack of definitive information—taking decisive action.

When we compared the proportion of strategic leaders struggling to demonstrate VUCA-linked behaviors to those who excelled (those who were average were excluded), two trends became clear:

First, the overall ratio was very high, 2.2 to 1 on average, comparing those who struggled versus those who excelled in demonstrating key behaviors despite ample opportunity during the structured assessment. That is, across all critical VUCA-counteracting skills we saw deficiency more than twice as often as mastery.

The second and more surprising trend is that strategic leader shortcomings were far from evenly distributed. Many more were deficient in Volatility—and the influential, visionary, and inspirational behaviors needed to counteract these pressures of rapid, high-stakes, and dynamic change—than Uncertainty, Complexity, or Ambiguity. Though for these three challenges, signs were less dire, it’s difficult to be optimistic when in each case those who shone in VUCA-aligned skills were outnumbered by those who were weak.

What does this say about the intersection of current leadership talent with emerging business trends? One implication is predictable yet unfortunate: The foundational behaviors to truly offset VUCA challenges are lacking more often than not across the leadership ranks. Another implication is one of prioritization: For talent at the executive level, precision in choice and timing of development opportunities is crucial. Though many factors underlie the design of a particular assessment and development program, when it comes to VUCA, signs point to Volatility—and the ability of a strategic leader to create and gain commitment to a shared vision that neutralizes employee wariness about massive and imminent changes—as the primary target for these efforts, with Uncertainty a secondary focus, and both Complexity and Ambiguity lesser concerns initially.

By their nature, VUCA forces are almost certain to perpetually increase, yet those the strategic level can be a buffer for these ever-building pressures, preventing a pervasive and damaging level of influence on the broader employee population. By focusing talent management approaches on the elements of VUCA where skill gaps are most likely, organizations can reduce risks and stay a step ahead of these ever-encroaching challenges.

Evan Sinar, Ph.D., is the chief scientist and director of DDI’s Center for Analytics and Behavioral Research (CABER).

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